Studies in Modelling and Decision Support
Edited by M. A. Quaddus and M. A.B. Siddique
Chapter 8: Resources, Pollution and Sustainable Energy Policies: The Case of Pakistan
Hassan Qudrat-Ullah Introduction The development of sustainable policies for the energy sector is a complex task that poses serious dilemmas for the economies of many developing countries. Pakistan, a developing country with a rapidly growing energy consumer economy, faces a similar situation. According to some recent demand projections, there is a 12 per cent annual growth rate in demand for electricity over the foreseeable future (HDIP, 1990). To meet such a high demand, in 1991–92 the government of Pakistan introduced reforms that provide incentives for private (including foreign) sector investments, particularly in the electric power industry. In response to these lucrative incentives, many independent power producers (IPPs) signed agreements with the government. Most of the IPPs’ offers included oil-, coal- and/or gas-ﬁred electricity generation. Hydroelectric generation, despite its rich resource base in the country, did not hold much attraction for the IPPs, perhaps because it involved very large capital investment. Pakistan depends signiﬁcantly (40 per cent) on oil imports to meet domestic oil demand. On the other hand oil, coal and/or gas power plants pose serious challenges to the environment in the form of CO2 emissions. Moreover, recent global developments1 in the need for limitation and reduction of greenhouse gases puts a high demand on environmental considerations when making energy and electricity policies. This necessitates the assessment of the existing electricity policy and eventually a decision by policy-makers either to reinforce it or possibly introduce a shift. Moreover, recent development thinking is that to achieve sustainable development...
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